Middle Tennessee Region
DIVISION OF BENEFITS ADMINISTRATION William R. Snodgrass Tennessee
Tower
312 Rosa L Parks Avenue, Suite 2600 Nashville, Tennessee
37243
Dave Goetz
Phone: 615.741.4517
FROM: Laurie Lee X44
DATE: April 1, 2010
RE:
Amendments # 4 to CIGNA Point of Service (POS) Contracts for East #
2038, Middle # 2039 and West #2040
This is a request for a start date of May 1, 2010 for the
amendments to these three contracts. These amendments add funding
to continue Per Member Per Month (PMPM) administrative fee payments
for members of the State, Local Education and Local Government
Insurance Plans. The PMPM fees continue at the 2010 fee schedule
rate for all three Plans.
These amendments are not provided with the requested sixty day
advance. The funding balance remaining in the three contracts
requires the addition of the funds sooner than 60 days to continue
to make the administrative payments on these three contracts. The
funding balances were incorrectly stated during the transition from
the STARS accounting system to the new Edison system and this .
discrepancy was only recently discovered. Benefits Administration
has added appropriate financial oversight to ensure that this type
of error is not repeated.
Thank you for your consideration of this request.
RECEIVED
*Original Contract Number: FA 06 16533 *Original RFS Number:
317.86-032
Edison Contract Number: (if applicable)
2039 Edison RFS Number: (if
applicable) 31786
Current Request Amendment Number: (if applicable)
# 4
May 1, 2010
*Submitted Within Sixty (60) days: No.
If not, explain: Benefits Administration delayed this amendment to
research the error made loading the contract maximum liability
during conversion.
*Contract Vendor Name: CIGNA POS Middle
*Current Maximum Liability: $33,000,000.00 *Current Contract
Allocation by Fiscal Year: (as Shown on Most Current Fully Executed
Contract Summary Sheet) FY: 2006 FY: 2007 FY: 2008 FY: 2009 FY:
2010 FY: 2011
$19,000,000.00 $2,000,000.00 $2,000,000.00 $2,000.000.00
$6,200.000.00 $1,800,000.00
*Current Total Expenditures by Fiscal Year of Contract: (attach
backup documentation from STARS or FDAS report) FY: 2006 FY: 2007
FY: 2008 FY: 2009 YTD FY: 2010 FY:
$2,556,552.52 $5,491,128.51 $6,747,997.69 $11,358,044.22
$9,536,322.06 $
IF Contract Allocation has been greater than Contract Expenditures,
please give the reasons and explain where surplus funds were
spent:
Contract Per Member Per Month (PMPM) expenditures are based on
estimates of annual plan membership for the term of the contract.
Actual membership may vary from the original estimates during the
term of each contract, and therefore funding needs may vary.
Monthly funding of contract expenditures is obtained, on an as
needed basis, from each separate plan funds (State Fund 55, Local
Education Fund 56, and Local Government Fund 58). Plan fund
revenues are obtained primarily from employer and employee
premiums, which are annually set by the committees, and utilized
for paying all health plan fund expenses (claims and administrative
expenses, etc.), and can only be utilized for that purpose.
IF surplus funds have been carried forward, please give the reasons
and provide the authority for the carry forward provision:
Under TCA —Title 8: Chapter 27-102 (a), 301 (b), and 207 (d) the
State, Local Education and Local Government insurance committees
have the authority to enter into contracts with insurance
companies, claims administrators, and other organizations for some
or all of the insurance benefits or services, including actuarial
and consulting advice for the purpose of
Effective October 30, 2009
Supplemental Documentation Required for Fiscal Review
Committee
administering the state sponsored basic health plans. Monthly
funding of contract expenditures are obtained, on an as needed
basis, from each separate plan fund (State Fund 55, Local Education
Fund 56, and Local Government Fund 58). By approving the one year
contract extensions, the insurance committees have authorized the
payment of expenses from the funds for the additional one year
extension. The present estimated maximum liability of the contract
is changed based on the estimate of the additional one year
expenses due to the contract extension. These contracts are in
allotment code 317.86 that is an off-line code and does not submit
carry-forward letters. The insurance funds are billed each month
and they each carry a fund balance which can be found on the
Comprehensive Annual Financial Report (CAFR).
IF Contract Expenditures exceeded
After the conversion from STARS to Edison, the beginning balance in
Edison was overstated. This overstatement allowed the maximum
liability of the contract to be exceeded. This error has been
corrected and additional financial oversight within Benefits
Administration has been included in this process to ensure it
does
Contract Allocation, please give the reasons and explain how
funding was acquired to pay the overage: not occur again. A
conversion between two accounting systems
is a rare, infrequent and unusual occurrence. The funding was
obtained from the Public Sector Plan funds.
*Contract Funding State: Federal: Source/Amount:
Interdepartmental: $33,000,000.00
If "other" please define:
Dates of All Previous Amendments or Revisions: Brief Description of
Actions in Previous Amendments or Revisions: (if applicable)(if
applicable)
Amendment # 3 — October 2009
Amendment extends term through January 31, 2012. Defines the PMPM
Adm. Fee for CY 2010. Defines the Target Claims /Trend Costs for CY
2010. Carves out pharmacy benefits April 2010 and defines the
contractor's responsibility for claims during the last thirteen
months of the contract term.
Amendment # 2 — November 2008 Amendment extends the term adding
additional funds for the extension and adds responsibilities
regarding Edison
November 2007 — Revision Re-allocate funds to establish retiree
funds codes 51, 52 and 53 as required by Comprehensive Annual
Financial Report (CAFR) of the State of Tennessee.
Amendment # 1 — April 2007
Amendment revised communications and contact information and added
language regarding the transition from the Tennessee Insurance
System (TIS) to the State's Enterprise Resource Planning (ERP)
system.
Method of Original Award: (if applicable) RFP
*What were the projected costs of the service for the entire term
of the contract prior to contract award?
At the time of the procurement in 2005, the exact number of
potential participants in this plan was unknown. An initial funding
amount of $25,000,000 was allocated with the understanding that
should additional funding be required to provide the administrative
Per Member Per Month (PMPM) fee would be increased.
Effective October 30, 2009
Supplemental Documentation Required for Fiscal Review
Committee
For all new non-competitive contracts and any contract amendment
that changes Sections A or C.3. of the original or previously
amended contract document, provide estimates based on information
provided the Department by the vendor for determination of contract
maximum liability. Add rows as necessary to provide all information
requested.
If it is determined that the question is not applicable to your
contract document attach detailed explanation as to why that
determination was made.
Planned expenditures by fiscal year by deliverable. Add rows as
necessary to indicate all estimated contract expenditures.
Deliverable description:
FY: FY: FY: FY: FY:
Proposed savings to be realized per fiscal year by entering into
this contract. If amendment to an existing contract, please
indicate the proposed savings to be realized by the
amendment.
Add rows as necessary to define all potential savings per
deliverable. Deliverable description:
FY: FY: FY: FY: FY:
Comparison of cost per fiscal year of obtaining this service
through the proposed amendment vs. other options. List other
options available (including other other options, and source of
information for comparison of other options (e.g. site). Add rows
as necessary to indicate price differentials between contract
contract or vendors), cost of
catalog, Web deliverables.
Proposed Vendor Cost: (name of FY: FY: FY: FY: FY:
vendor)
FY: FY: FY: FY: FY:
Other Vendor Cost: (name of vendor)
FY: FY: FY: FY: FY:
Effective October 30, 2009
1) RFS # 31786 - 00013
EXISTING CONTRACT INFORMATON
3) Service Caption : Self insured Point of Service (POS) - middle
service area.
4) Contractor : Connecticut General Life Insurance Company
5) Contract # Edison ID # 2039 (FA-06-16533-00)
6) Contract Start Date : January 1, 2006
7) CURRENT Contract End Date : (if ALL options to extend the
contract are exercised) January 31, 2012
8) CURRENT Maximum Cost : (if ALL options to extend the contract
are exercised) $33,000,000.00
PROPOSED AMENDMENT INFORMATON
1) Amendment # 4
10) Amendment Effective Date : (attached explanation required if
< 60 days after F&A receipt) May 1, 2010
11) PROPOSED Contract End Date : (if ALL options to extend the
contract are exercised) January 31, 2012
12) PROPOSED Maximum Cost : (if ALL options to extend the contract
are exercised) $47,044,100.00
13) Approval Criteria : use of Non-Competitive Negotiation is in
the best interest of the state (se lect one)
only one uniquely qualified service provider able to provide the
service
14) Description of the Proposed Amendment Effects & Any
Additional Service :
Amendment It 4 adds additional funding increasing the maximum
liability to the amount listed above in item # 12.
15) Explanation of Need for the Proposed Amendment :
Amendment # 4 adds additional funding required for administrative,
per member per month (PMPM) expenditures associated with the
contract and for any risk share payments owed to the Contractor by
the State.
16) Name & Address of Contractor's Current Principal Owner(s) :
(not required for a TN state education institution)
Connecticut General Life Insurance Company (CIGNA) 1000 Corporate
Center Drive Franklin, Tennessee 37067
17) Office for Information Resources Endorsement : (required for
information technology service; n/a to THDA)
Documentation is ... X Not Applicable to this Request I I Attached
to this Request
18) eHealth Initiative Endorsement : (required for health-related
professional, pharmaceutical, laboratory, or imaging service)
Page 1 of 2
Attached to this Request
19) Department of Human Resources Endorsement : (required for state
employees training service)
Documentation is ...
Attached to this
20) Description of Procuring Agency Efforts to Identify Reasonable,
Competitive, Procurement Alternatives :
No procurement alternatives were sought as this is the final year
administrative fees will be paid under this contract document. The
Third Party Administrators (TPAs) RFP was released March19, 2010 to
secure new vendors for this service on January 1, 2011.
21) Justification for the Proposed Non-Competitive Amendment
:
The additional funds are required to pay monthly PMPM
administrative fees and any risk share funds owed by the State to
the current Contractor based on the annual reconciliation performed
in the fall for the prior year's activities. The settlement date
for the risk sharing agreement will be no later than nine (9)
months from the end of each contract year.
For example, year five (calendar year 2010) will be settled no
later than September 30, 2011.
SIGNATURE & DATE /
:')//I"''
NON-AMD1230
AGENCY HEAD SIGNATURE & DATE : (must be signed & dated by
the ACTUAL procuring agency head as detailed on the Signature
Certification on file with OCR— signature by an authorized
signatory will be accepted only in documented exigent
circumstances)
3hnh
^.gency Tracking if Edison OD Contract # Amendment #
31766-00013 2039 FA – 06-16533-00 4
Contractor
q C° Or a V° 06-0303370
Amendment Purpose/ Effects
Amendment # 4 adds additional funding required for administrative,
per member per month (PMPM) expenditures associated with the
contract and for any risk share payments owed to the Contractor by
the State..
Contract
FY State Federal Interdepartmental Other TOT L Contract Amount 2006
$19,000,000.00 $19,000,000.00
2007 $2,000,000.00 $2,000,000.00
2008 $2,000,000.00 $2,000,000.00
2009 $2,000,000.00 $2,000,000.00
2010 $11,384,100.00 $11,384,100.00
2011 $10,660,000.00 $10,660,000.00
TOTAL: $47,044,100.00 $47,044,100.00
American Recovery and Reinvestment Act (ARRA) Funding – Ti VIES @
NO
— COMPLETE FOR AMENDMENTS — Agency Contact & Telephone # END
DATE AMENDED?
C YES
a NO Marlene Alvarez – Manager of Procurement & Contracting I
Tennessee Department of Finance & Administration,
Benefits
Base Contract & THIS Amendment Administration 312 Rosa L Parks
Avenue, Suite 2600
FY Prior Amendments ONLY Nashville, Tennessee 37243
615.253.8358
2006 $19,000,000.00 Agency Budget Officer Approval (there is a
balance in the appropriation
2007 $2,000,000.00 $0.00 from which this obligation is required to
be paid that is not otherwise encumbered to pay obligations
previously incurred)
2008 $2,000,000.00 $0.00
2009 $2,000,000.00 $0.00
TOTAL: $33,000,000.00 $14,044,100.00
The original contract (FA-06-16533) was procured through the RFP
process.
MENDMENT FOUR TO CONTRACT FA—06—16633—00 (Edison ID # 2039)
This Contract Amendment is made and entered by and between the
State of Tennessee, State Insurance Committee, Local Education
Insurance Committee, and Local Government Insurance Committee,
hereinafter referred to as the "State" and Connecticut General Life
Insurance Company, hereinafter referred to as the "Contractor." It
is mutually understood and agreed by and between said, undersigned
contracting parties that the subject Contract is hereby amended as
follows:
1.
The text of Contract Section C:1. is deleted in its entirety and
replaced with the following:
C.1.
Maximum Liability. In no event shall the maximum liability of the
State under this Contract exceed Forty-Seven Million Forty-Four
Thousand One Hundred Dollars ($47,044,100.00). The per member per
month (PMPM) Rates in Section C.3 shall constitute the entire
compensation due the Contractor for the Service and all of the
Contractor's obligations hereunder regardless of the difficulty,
materials or equipment required. The PM PM Rates include, but are
not limited to, all applicable taxes, fees, overheads, profit, and
all other direct and indirect costs incurred or to be incurred by
the Contractor.
The Contractor is not entitled to be paid the maximum liability for
any period under the Contract or any extensions of the Contract for
work not requested by the State. The maximum liability represents
available funds for payment to the Contractor and does not
guarantee payment of any such funds to the Contractor under this
Contract unless the State requests work and the Contractor performs
said work. In which case, the Contractor shall be paid in
accordance with the PMPM Rates detailed in Section C.3. The State
is under no obligation to request work from the Contractor in any
specific dollar amounts or to request any work at all from the
Contractor during any period of this Contract.
The revisions set forth herein shall be effective on the date of
final approval by the appropriate State officials in accordance
with applicable Tennessee State laws and regulations. All other
terms and conditions not expressly amended herein shall remain in
full force and effect.
IN WITNESS WHEREOF:
CONTRACTOR SIGNATURE
STATE OF TENNESSEE, STATE INSURANCE COMMITTEE, LOCAL EDUCATION
INSURANCE COMMITTEE, LOCAL GOVERNMENT INSURANCE COMMITTEE:
Page 1 of 2
DATE
GENERAL ASSEMBLY OF THE STATE OF TENNESSEE FISCAL REVIEW
COMMITTEE
320 Sixth Avenue, North — 8t1 Floor NASHVILLE, TENNESSEE
37243-0057
615-741-2564
Harry Brooks
Speaker Kent Williams, ex officio
MEMORANDUM
TO:
The Honorable Dave Goetz, Commissioner Department of Finance and
Administration
VFROM:
V
DATE:
RFS# 317.86-00013 Department: Finance & Administration/Benefits
Administration Contractor: Connecticut General Life Insurance
Company - CIGNA Summary: The vendor currently provides Self-Insured
Point of Service (POS) benefits for enrollees in the Middle
Tennessee region. The proposed amendment extends the current
contract for an additional 25 months, carves out pharmacy benefits,
and increases the maximum liability by $1,800,000. Maximum
liability: $31,200,000 Maximum liability w/amendment:
$33,000,000
After review, the Fiscal Review Committee voted to recommend
approval of the contract amendment.
cc: Ms. Laurie Lee, Executive Director, Benefits Administration Mr.
Robert Barlow, Director, Office of Contracts Review
Sen. Bill Ketron, Chairman Senators
Douglas Henry
RECEIVED
DEPARTMENT OF FINANCE AND ADMINISTRATION DIVISION OF BENEFITS
ADMINISTRATION
William R. Snodgrass Tennessee Tower 312 Rosa L Parks Avenue, Suite
2600
Nashville, Tennessee 37243
From: John Anderson, Director of Public Sector Plans, Benefits
Administrq_.o
Date:
RE: Amendments to extend the five (5) Connecticut General Life
Insurance Company contracts through Jan. 31, 2012 adds Contractor
responsibilities for the transition to a Pharmacy Benefits Manager.
Contract numbers include FA-06-16533-00 (Edison ID # 2039),
FA-06-16532-00 (Edison # 2038), FA-06-16534-00 (Edison # 2040),
FA-06- 16531-00 (Edison ID # 2037), and FA-06-16530-00 (Edison ID #
2036)
The five (5) enclosed contract amendments extend the contracts
between the State, Local Education and Local Government Insurance
Committees and Connecticut General Life Insurance Company for an
additional two (2) years and one (1) month. The first year (2010)
continues the provision of administrative service for the HMO and
POS plan options, and the last thirteen (13) months of this
contract amendment provides for the payment of claims during the
"run out period". These amendments were approved by the Committees
on March 31, 2009. The original contracts, secured through a
competitive procurement, contain provisions under Section B.2 Term
Extension for an initial three (36 year term with two (2) one (1)
year extensions. This amendment extends beyond the five (5) year
term. A rule exception has been requested and approved by the
Commissioner of Finance and Administration, under separate cover,
to allow for this amendment. The contract amendments are the same
for each contract with the exception that they cover different HMO
service areas (Nashville and Memphis), and different POS service
areas (East, Middle and West). There is no increase in the
administrative fees for 2010, which remain at $14.52 PMPM for the
HMO plan options and $14.58 for the POS plan options. Four of the
five amendments require an increase in the maximum liability. The
HMO Memphis amendment will require no increase in the maximum
liability. Additional language within each contract amendment
addresses the Contractor's responsibilities for the transition to
one Pharmacy Benefits Manager (PBM). The Request for Proposals for
the PBM is currently under review within the Department of Finance
and Administration.
The base contract for each of the five regions is included as are
the prior amendments, all revisions to the contract summary sheets,
the signed non-competitive amendment request and the supplemental
documentation required for the Fiscal Review Committee.
Thank you for your consideration of this request.
Supplemental Documentation Required for Fiscal Review
Committee
*Contact Name: Marlene Alvarez *Contact Phone: 615.253.8358
*Contract Number: Edison ID # 2039 (was FA-06-16533)
*RFS Number: 31786 — 00013 (was 317.86-032)
*original Contract Begin Date: 01 . 01.2006
*Current End Date: 12.31.2009
3
*Department Submitting: Finance & Administration
*Submitted Within Sixty (60) days: Yes
If not, explain:
*Current Maximum Liability: $31,200,000.
*Current Contract Allocation by Fiscal Year: (as Shown on Most
Current Contract Summary Sheet) FY: 2006 FY: 2007 FY: 2008 FY: 2009
FY: 2010 FY:
$19,000,000 $2,000,000 $2,000,000 $2,000.000 $6,200.000
*Current Total Expenditures by Fiscal Year of Contract: (attach
backup documentation from STARS or FDAS report) FY: 2006 FY: 2007
FY: 2008 FY: 2009 YTD FY: FY:
$2,556,552.52 $5,491,128.51 $7,499,405.83 $11,358,044.22 $
IF Contract Allocation has been greater than Contract Expenditures,
please give the reasons and explain where surplus funds were
spent:
Contract Per Member Per Month (PMPM) expenditures are based on
estimates of annual plan membership for the term of the contract.
Actual membership may vary from the original estimates during the
term of each contract, and therefore funding needs may vary.
Monthly funding of contract expenditures is obtained, on an as
needed basis, from each separate plan funds (State Fund 55, Local
Education Fund 56, and Local Government Fund 58). Plan fund
revenues are obtained primarily from employer and employee
premiums, which are annually set by the committees, and utilized
for paying all health plan fund expenses (claims and administrative
expenses, etc.), and can only be utilized for that purpose.
IF surplus funds have been carried forward, please give the reasons
and provide the authority for the carry forward provision:
Under TCA —Title 8: Chapter 27-102 (a), 301 (b), and 207 (d) the
State, Local Education and Local Government insurance committees
have the
Supplemental Documentation Required for Fiscal Review
Committee
authority to enter into contracts with insurance companies, claims
administrators, and other organizations for some or all of the
insurance benefits or services, including actuarial and consulting
advice for the purpose of administering the state sponsored basic
health plans. Monthly funding of contract expenditures are
obtained, on an as needed basis, from each separate plan fund
(State Fund 55, Local Education Fund 56, and Local Government Fund
58). By approving the one year contract extensions, the insurance
committees have authorized the payment of expenses from the funds
for the additional one year extension. The present estimated
maximum liability of the contract is changed based on the estimate
of the additional one year expenses due to the contract extension.
These contracts are in allotment code 317.86 that is an off-line
code and does not submit carry-forward letters. The insurance funds
are billed each month and they each carry a fund balance which can
be found on the Comprehensive Annual Financial Report (CAFR).
IF Contract Expenditures exceeded Contract Allocation, please give
the reasons and
FY the
2007, 2008 and 2009 expenditures exceeded allocation. Funding to
pay these expenditures provided from funding availability
rolled
from FY 2006.forward explain how funding was acquired to pay the
was overage:
*Contract Funding State: Federal: Source/Amount:
Interdepartmental: $31,200,000 Other:
If "other" please define:
Dates of All Previous Amendments or Brief Description of Actions in
Previous Amendments Revisions: (if applicable) or Revisions: (if
applicable)
April 2007 — Amendment # 1 Updates Contacts for contract (section
E.2.) and adds Edison requirements
November 2007 — Revision Re-allocate funds to establish retiree
funds codes 51, 52 and 53 as required by Comprehensive Annual
Financial Report (CAFR) of the State of Tennessee.
November, 2008 — Amendment # 2 Extension to 12.31.09, increased
maximum liability by $6.2 million, added payment methodology for CY
2009, added Target Claims Cost for CY 2009, updated Contacts
(Section E.2.), added Prohibition of Illegal Immigrants and
Voluntary Buyout Language.
Method of Original Award: (if applicable) RFP
Include a detailed breakdown of the actual See attached — "CIGNA —
POS Middle expenditures anticipated in each year of the Payments
Since Inception as of June 30, contract. Include specific line
items, source of 2009" funding, and disposition of any excess fund.
(if applicable)
Supplemental Documentation Required for Fiscal Review
Committee
Include a detailed breakdown, in dollars, of any savings that the
department anticipates will result from this contract. Include, at
a minimum, reduction in positions, reduction in equipment costs,
reduction in travel. (if applicable)
No specific dollar amount of savings is anticipated as a result
from this contract amendment.
Include a detailed analysis, in dollars, of the cost of obtaining
this service through the proposed contract as compared to other
options. (if applicable)
This contract is in the fifth year of the term of the contract.
Expenditures for the current year and the extension year of the
contract are attached and are based on estimated member
enrollment.
CIGNA POS MIDDLE PAYMENTS SINCE INCEPTION as of June 30, 2009 STARS
Contract Number: FA0616533 Edison Contract Number: 2039
Fiscal Year Total Payments
11,358,044.22
Total
26,915,131.08
Projected Expenditures for 2009 and 2010 Based on Estimated Member
Enrollment
CIGNA HMO NASHVILLE CIGNA HMO MEMPHIS CIGNA POS EAST CIGNA POS
MIDDLE CIGNA POS WEST
STATE PLAN;
Estimated monthly
LOCAL
Jul-09 Aug-09 Sep-09 Oct-09 Nov-09 Dec-09 Jan-10 Feb-10 Mar-10
Apr-10
May-10 Jun-10
Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10
16,500 16,500 16,500 16,500 16,500 16,500
16,500 16,500 16,500 16,500 16,500 16,500 16,500 16,500 16,500
16,500 16,500 16,500
16,500 16,500 16,500 16,500 16,500 16,500
Estimated
7,600 7,600 7,600 7,600 7,600 7,600
7,600 7,600 7,600 7,600 7,600 7,600 7,600 7,600 7,600 7,600 7,600
7,600
7,600 7,600 7,600 7,600 7,600 7,600
Estimated
11,300 11,300 11,300 11,300 11,300 11,300
11,300 11,300 11,300 11,300 11,300 11,300 11,300 11,300 11,300
11,300 11,300 11,300
11,300 11,300 11,300 11,300 11,300 11,300
Estimated
30,600 30,600 30,600 30,600 30,600 30,600
30,600 30,600 30,600 30,600 30,600 30,600 30,600 30,600 30,600
30,600 30,600 30,600
30,600 30,600 30,600 30,600 30,600 30,600
Estimated
18,000 18,000 18,000 18,000 18,000 18,000
18,000 18,000 18,000 18,000 18,000 18,000 18,000 18,000 18,000
18,000 18,000 18,000
18,000 18,000 18,000 18,000 18,000 18,000
Estimated
PLAN: Members Members Members Members Mem >ersl Jan-09 1,725
$
25,047.00 625 $
9,075.00 20,500 $
298,890.00 22,000 $
320,760.00 12,300 $
LOCAL, Estimated Estimated Estimated Estimated Estimated GOVERNMENT
Monthly Monthly , Monthly Monthly Monthly
PLAN: Members Admin fees Members Admin fees Members Admin fees
Members Admin fees Members Admin fees Jan-09 675 $
9,801.00 625 $
9,075.00 2,700 $
39,366.00 4,650 $
67,797.00 2,750 $
2) Procuring Agency : Finance & Administration, Benefits
Administration
EXISTING CONTRACT INFORMATON
Eft ®D 3) Service Caption : Self insured Point of Service (POS) —
Middle service area.
spy
4) Contractor : Connecticut General Life Insurance Company JUL 3 1
2009
5) Contract # FA-06-16533-00 (Edison ID # 2039)
FISCAL F^^Vi
VV 6) Contract Start Date : January 1, 2006
7) CURRENT Contract End Date : (if ALL options to extend the
contract are exercised) December 31, 2009
8) CURRENT Maximum Cost : (if ALL options to extend the contract
are exercised) $31,200,000
PROPOSED AMENDMENT INFORMATON
9) Amendment # 3
10) Amendment Effective Date : (attached explanation required if
< 60 days after F&A receipt) December 1, 2009
11) PROPOSED Contract End Date : (if ALL options to extend the
contract are exercised) January 31, 2012
12) PROPOSED Maximum Cost : (if ALL options to extend the contract
are exercised) $33,000,000
13) Approval Criteria : use of Non-Competitive Negotiation is in
the best interest of the state (select one)
n only one uniquely qualified service provider able to provide the
service
14) Description of the Proposed Amendment Effects & Any
Additional Service :
Amendment 3 extends term to January 31, 2012; defines the PMPM
Administrative Fee for CY 2010; defines the Target Claims/Trend
Costs for CY 2010; carves out the pharmacy benefit as of April
2010; and defines the Contractor's responsibilities for claims
during the last thirteen months of the contract.
15) Explanation of Need for the Proposed Amendment :
Amendment 3 extends the contract with Connecticut General Life
Insurance Company to provide administrative services to the state
sponsored POS plan serving the Middle service area for an
additional twenty-five (25) month period (1/1/10 through 01/31/12).
It includes a no increase in the administrative fees, a
continuation of the risk sharing arrangement for a favorable,
guaranteed trend of 8%, and adds funds to the contract. It also
carves out the pharmacy benefit option from the contract as of
April 2010 (or as designated by Benefits Administration) and
defines the Contractor's responsibilities,during the last thirteen
(13) months of the contract (the "run-out period").
16) Name & Address of Contractor's Current Principal Owner(s) :
(not required for a TN state education institution)
Connecticut General Life Insurance Company (CIGNA) 1000 Corporate
Center Drive Franklin, Tennessee 37067
17) Office for Information Resources Endorsement : (required for
information technology service; n/a to THDA)
APPROVED
NON-AMD123008
Documentation is ... @ Not Applicable to this Request n Attached to
this Request
18) eHealth Initiative Endorsement : (required for health-related
professional, pharmaceutical, laboratory, or imaging service)
Documentation is ... @ Not Applicable to this Request Attached to
this Request
19) Department of Human Resources Endorsement : (required for state
employees training service)
Documentation is ... @ Not Applicable to this Request Attached to
this Request
20) Description of Procuring Agency Efforts to Identify Reasonable,
Competitive, Procurement Alternatives :
No procurement alternatives were sought. Benefits Administration
and the State Insurance Committees are in agreement with the
extension of the contract with no increase in administrative fees
and favorable risk sharing trend factor of 8% negotiated with the
Contractor. A contract extension also removes the Contractor's
responsibility for administrating the pharmacy benefits. The term
extension is appropriate and in the best interest of the State and
its' employees.
21) Justification for the Proposed Non-Competitive Amendment
:
The maintenance of the present administrative fees and carve out of
the pharmacy benefits in addition to the favorable risk sharing
arrangement negotiated with the Contractor are acceptable to the
State. The extension of the contract for the additional period is
also necessary in order to provide Benefits Administration and the
State Insurance Committees the time necessary to implement new plan
redesigns for plan year 2011.
AGENCY HEAD SIGNATURE & DATE : (must be signed &.dated by
the ACTUAL procuring agency head as detailed on the Signature
Certification on file with OCR— signature by an authorized
signatory will be accepted only in documented exigent
circumstances)
SIGNATURE & DATE //1)''J'''''t 1/. ?Ad,/
Page 2 of 2
SUBJECT RULE NUMBER(S):
"0620-3-3-.07(5) " for an exception permitting a contract term
greater than five (5) years
DESCRIPTION OF EXCEPTION(S):
The department seeks a rule exception to amend the contract to a
period commencing on January 1, 2006 and ending on January 31, 2012
(a 73-month period).
JUSTIFICATION: (compelling rationale for and validation of rule
exception request)
Section A.5.13. in Amendment # 3 to the contract specifies:
For the time period beginning January 1, 2011, or in the event of
its termination or cancellation for any reason, the Contractor
shall be responsible for the processing of all claims incurred for
medical services rendered or medical supplies purchased during the
prior term period of this contract with no additional
administrative cost to the State. Incurred claims shall be
processed for the last thirteen (13) months of the term of the
contract with no additional administrative cost to the State. In
addition, for the period January 1, 2011 through January 1, 2012 of
the Contract, the Contractor is responsible for working with the
State to settle the risk sharing arrangement for the contract year
of 2010 per section C.4 of this contract.
Therefore, it is necessary to extend the contract end date by
thirteen (13) months (the run out period) to ensure that the
Contractor is able to provide the required services with no
additional administrative costs to the State and to settle the risk
sharing arrangement.
INFORMATION REGARDING THE APPLICABLE CONTRACT
CONTRACTOR: Connecticut General Life Insurance Company
SERVICE INVOLVED: Self-insured Health Maintenance Organization
(POS) — Middle service area.
BEGIN DATE: January 1, 2006
END DATE (including ALL options for term extension): January 31,
2012
MAXIMUM. LIABILITY (including ALL options for term extension):
$33,000,000.
AGENCY HEAD REQUEST SIGNATURE: authorized the procuring agency head
or authorized signatory)
SIGNATURE DATE: '>12.--)
C- Or O V- 06-0303370
Contractor
q Connecticut General Life Insurance Company-.POS Middle
Amendment Purpose/ Effects Amendment extends term to January 31,
2012; defines the PMPM .Administrative Fee for CY 2010; defines the
Target Claims/Trend Costs for CY 2010; carves out the pharmacy
benefit as of April 2010; and defines the Contractor's
responsibilities for claims during the last thirteen months of the
contract term ("run-out period").
Contract Begin Date January 1, 2006
Contract End Date January 31, 2012
Subrecipient or Vendor
Subreclplent O Vendor
2007 $2,000,000.00 $2,000,000.00
TOTAL: $33,000,000.00 $33,000,000.00
American Recovery and Reinvestment Act (ARRA) Funding - al YES f 1
NO — COMPLETE FOR AMENDMENTS —- Agency Contact & Telephone
#
Alvarez — Manager of Procurement & Contracting Department of
Finance & Administration, Benefits
L Parks Avenue, Suite 2600 Tennessee 37243
END DATE AMENDED?
THIS Amendment
ONLY Nashville, 615.253.8358
2006 $19,000,000.00 . Agency Budget Officer Approval (there is a
balance this obligation is required to be paid
to pay obiiga
ns previously incurred)
appropriation otherwise2007 $2 , 000 ,000.00 $0 .00 from
which
encumbered 2008 $2,000,000.00 $0.00
TOTAL: $31,200,000.00 $1,800,000.00
The original contract (FA-06-16533) was procured through the RFP
process.
AMENDMENT THREE TO CONTRACT FA--06-16533--00 (Edison ID #
2039)
This Contract Amendment Is made and entered by and between the
State of Tennessee, State Insurance Committee, Local Education
Insurance Committee, and Local Government Insurance Committee,
hereinafter referred to as the "State" and Connecticut General Life
Insurance Company, hereinafter referred to as the "Contractor." It
is mutually understood'and agreed by and between said, undersigned
contracting parties that the subject Contract is hereby amended as
follows:
1.
The text of Contract Section A,3.2. Is deleted in Its entirety and
replaced with the following:
A.3.2.
Retail and Mail Order Claims Adjudication - the Contractor
shall;
• Adjudicate and process all electronic point of sale and paper
retail and mall order pharmacy claims Incurred through March 31,
2010 or as otherwise determined by the State in strict accordance
with the State Pharmacy Benefits as contained in the State Plan
Document (Appendix 7.3 of RFP #317,86-032).
• Maintain an integrated retail and•mall order electronic
point-of-sale claims system that shait.have edits to verify
eligibility, covered drug benefits, and claim accuracy. Mail order
facilities shall have the capacity to process the volume of member
subscriptions.
• Make efforts to recover overpayments and reimburse underpayments
to the State • in accordance with applicable law and any applicable
State polices regarding the collection of overpayment and
reimbursement of underpayment.
• Have the ability to refill mall order prescriptions online
through the website, by telephone, or by mall, subject to
compliance with all applicable federal and state laws and
regulations.
2:
The text of Contract Section A.5.i 3. is deleted in its entirety
and replaced with the following:
A.5.13. For the time period beginning January 1, 2011, or in the
event of its termination or cancellation for any reason, the
Contractor shall be responsible for the processing of all claims
incurred for medical services rendered or medical supplies
purchased during the prior term period of this contract with no
additional administrative cost to the State. The Contractor shall
process incurred claims, at no additional cost to the State, in one
of the two following ways: (1) In the event of a premature contract
termination, for thirteen (13) months following the termination
date of the contract; or (2) in the event of a normal contract
termination, for the last thirteen (13) months of the term of the
contract, in addition, for the period January 1, 2011 through
January 1, 2012 of the Contract, the Contractor Is responsible for
working with the State to settle the risk sharing arrangement for
the contract year of 2010 per section C.4 of this contract.
The text of Contract Section A.8.7. Is deleted in its entirety and
replaced with the following:
A.8.7.
Submit health and medical claims data to the State's healthcare
data management vendor during the term of this contract on a
quarterly basis or more frequently as mutually agreed to by both
parties, until all claims incurred during the term of this contract
have been paid. Data shall be submitted in the format detailed In
Appendix 7.7, of RFP #317.86-032. The Contractor shall ensure that
all claims processed for payment have complete 1CD-9 and CPT4 codes
and valid provider identifications.
For each quarter of the contract term, and any extensions thereof,
claims data must meet the quality standards detailed in Contract
Attachment A, Performance Guarantee # 9, as determined by the
State's healthcare claims data management vendor (currently Thomson
Reuters).
Page 1 of b
The cost of the Initial claims data conversion to the format of the
State's data management vendor shall be borne by the Contractor.
The current vendor currently charges a maximum of $30,000 per
conversion. Furthermore, any changes associated with data formats
supplied to the State's data management vendor, which are
Contractor-Initiated or are due to meeting compliance with new
regulations, and which result in costs or fees, such costs or fees
shall be payable by the Contractor.
Claims data are to be submitted to the State's data management
vendor no later than the last day of the month following the end of
each calendar quarter. Failure to submit data by the deadline will
result in an assessment against the Contractor In the amount
of'$100 per day for the first and second working days past the
compliance date, and $500.00 for each working day thereafter, to a
maximum of $10,000 per quarter.
4.
The text of Contract Section B.1. Is deleted in Its entirety and
replaced with the following:
B.1. This, Contract shall be In effect commencing on January t 2006
and ending on January 31, 2012. The State shall have no obligation
for services rendered by the Contractor, whldh are not performed
within the specified term.
6.
The text of Contract Section C.I. is deleted in its entirety and
replaced with the following:
C.1. Maximum Liability. In no event shall the maximum liability of
the State under this Contract exceed Thirty-three Million Dollars
($33,000,000.00). The per member per month (PMPM) Rates In Section
C.3 shall constitute the entire compensation due the Contractor for
the Service and all of the Contractor's obligations hereunder
regardless of the . difficulty, materials or equipment required.
The PMPM Rates include, but are not limited to, all applicable
taxes, fees, overheads, profit, and ail other direct and Indirect
costs Incurred or to be incurred by the Contractor.
The Contractor Is not entitled to be paid the-maximum liability for
any period under the Contract or any extensions of the Contract for
work not requested by the State. The maximum liability represents
available funds for payment to the Contractor and does not
guarantee payment of any such funds to the Contractor under this
Contract unless the State requests work and the Contractor performs
said work. In which case, the Contractor shall be paid In
accordance with the PMPM Rates detailed in Section C.3. The State
Is under no obligation to request work from the Contractor in any
specific dollar amounts or to request any work at all from the
Contractor during any period of this Contract.
• 6.
The text of Contract Section C.3. is deleted in its entirety and
replaced with the following:
C.3. - Payment Methodology. The Contractor shall be compensated
based on the PMPM Rates herein for units of service authorized by
the State in a total amount not to exceed the Contract Maximum
Liability established in Section C.1. The State shall compensate
the Contractor monthly for the services outlined in this contract,
at the per member per month (PMPM) rates Indicated in the following
table, based upon the number of members certified by the State to
the Contractor. Monthly payments will be made for each month
extending from and including January 2006 to December 2010.
PMPM Administrative Fee
PMPM 2000 PMPM 2007 PMPM 2008 PMPM 2009 PMPM 2010 . State Plan
$9.59 $9.59 $14.00 $14.58 $14.58
Local Education Plan $9.59 $9.69 $14.00 $14.58 $14.68
Local Government-Plan $9.59 $9.59 $14.00 $14.58 $14.68
Page 2 of 8
There will be no PMPM Adminletrative Fee paid to the Contractor for
the time period January 1, 20.11 through January 31, 2012 of this
Contract.
The Contractor shall submit monthly invoices, in form and substance
acceptable to the State with all of the necessary supporting
documentation, prior to any payment. Such Invoices shall be
submitted for completed units of service or project milestones for
the amount stipulated.
7.
The text of Contract Section C.4. Is deleted in its entirety and
replaced with the following:
C.4. Risk Free Corridot will Mean a range between Five percent (5%)
above and Five percent (5%) below the targeted POS PMPM cost level.
Effective January 1, 2009 the target level will'be the aggregate
HMO and POS claims cost for all CIGNA plans. Within this range the
Contractor Is neither penalized nor.rewarded for Plan financial
performance. Calculation of the Risk Free Corridor will be
determined by calculating the figures 5% below and 5% above the
Target Claims Cost (see Section C.4.1. following).
C.4,1. Taraet Claims Cost: The Contractor agrees to the Target
Clalms/Trend Cost contained in the Cost Proposal (Attachment 6.4,
Part B, Incorporated by reference). Calculation of the Target
Claims Coat, for use In determining Risk Sharing Percentages
(Section C.4.2. below), will be as follows:
The State, Local Education, and Local Government weighted POS Cost
PMPM claims will be totaled, for each year as Indicated below.
Effective January 1, 2009 the State, Local Education, and Local
Government weighted aggregate HMO and POS. PMPM claims for all
CIGNA plans will be utilized for calendar year 2009 as Indicated
below.
For claims Incurred And paid during...Year Claims, by plan
during... January 1, 2006 January 1, 2006
2006 through through State, Local Education, December 31, 2006
June, 30! 2007 and Local Government January 1, 2007 January 1,
2007
2007 weighted HMO Cost Per through through Member Per Month
December 31, 2007 June 30, 2008 (PMPM) claims January 1, 2008
January 1, 2008
2008 through through December 31, 2008 June 30, 2009
State, Local Education, January 1, 2009 January 1, 2009 2009 and
Local Government through through
weighted aggregated December 31, 2009 June 34, 2010 • HMO and POS
plan Cost January 1, 2010 January 1, 2010 Per Member Per Month
through through2010 (PMPM) for all CIGNA December 31, 2010 June 30,
2011 plan claims
The POS PMPM (effective calendar year 2009 and later years the
aggregate HMO and POS) cost for each year will be adjusted to
arrive at the Target Year PMPM cost by multiplying that cost by the
Contractor's Guaranteed Trend Factor contained in the following
table.
Pharmacy claims will be excluded from the calculation for the 2010
Contract year.
Contract Year
2006 -60.01% 2007
C.42. Risk Sharing Percentages/Maximum Risk Limits
• The State will pay the Contractor additional Administrative fees
of 40% of the difference between Actual Incurred PMPM claims cost
and Administrative fees and (the Target Incurred PMPM claims cost
minus Five percent (5%) plus Administrative fees), multiplied by
the sum of the number of members enrolled during each month of the
calendar year. Payments by the State to the Contractor under this
provision shall not exceed $3.00 Per Member Per Month (PMPM) per
year during the term of the contract.
• The Contractor Will refund to the State Administrative fees of
60% of the excess of the Actual incurred PMPM claims . cost and
Administrative fees and (the Target Incurred PMPM claims cost plus
Five percent•(5%) plus Administrative fees) multiplied by the sum
of the number of members enrolled during each month of the calendar
year. Payments by the Contractor to the State under this provision
shall not exceed $5.00 Per Member Per Month (PMPM) per year during
the term of the contract.
C.4.3. The settlement date for the risk sharing agreement will be
no later than Nine (9) months from the end of EACH contract year.
For example, year five (calendar year 2010) will be settled no
later than September 30, 2011.
C.4.4. Should the State elect to modify the benefits as provided in
the POS option, the State and Contractor shall mutually agree to
appropriately modify the risk sharing arrangement .based on•the
Impact of these changes on the claims experience for the year the
changes are Implemented.
8.
The following provision is added as Contract Section A.3.9,:
A.3.9. Effective April 1, 2010, or on an alternate date as
determined by the State, the State will exercise the option
contained in Section A,3.8. of this Contract and carve out the
pharmacy benefit. The Contractor will no longer be responsible for
administering the pharmacy benefits, except for pharmacy claims
incurred prior to 12:00 A.M. on April 1, 2010, or on an alternate
date as determined by the State.
9..
The following provision is added as Contract Section A.3.10.:
A.3.10. Effective April 1, 2010, or on an alternate date as
determined by , the State, the Contractor shall begin to accept a
weekly pharmacy claims data feed from the State's pharmacy benefits
manager via secure medium during the term of the contract. The data
shall be in the format specified by the State.
10.
The.following provision is added as Contract Section A.3.11.:
A.3.11. At the State's request, the Contractor shall provide
current member pharmacy data, via secure medium, to the State's new
pharmacy benefit manager, within thirty (30) days of the request.
The data may Include, but Is not limited to, current prior
authorizations, overrides, and open refills (mall and
retail).
The revisions set forth herein shall be offeotive December 1, 2009.
All other terms and conditions not expressly amended hereln•shali
remain in full force and effect.
IN WITNESS WHEREOF:
°t/,)x/oT DATECONTRACTOR SIGNATURE
Page 6 of 5
GENERAL ASSEMBLY OF THE STATE OF TENNESSEE FISCAL REVIEW
COMMITTEE
320 Sixth Avenue, North — 8th Floor NASHVILLE, TENNESSEE
37243-0057
615-741-2564
Harry Brooks
Speaker Kent Williams, ex officio
MEMORANDUM
TO:
The Honorable Dave Goetz, Commissioner Department of Finance and
Administration
VFROM:
V
DATE:
RFS# 317.86-00013 Department: Finance & Administration/Benefits
Administration Contractor: Connecticut General Life Insurance
Company - CIGNA Summary: The vendor currently provides Self-Insured
Point of Service (POS) benefits for enrollees in the Middle
Tennessee region. The proposed amendment extends the current
contract for an additional 25 months, carves out pharmacy benefits,
and increases the maximum liability by $1,800,000. Maximum
liability: $31,200,000 Maximum liability w/amendment:
$33,000,000
After review, the Fiscal Review Committee voted to recommend
approval of the contract amendment.
cc: Ms. Laurie Lee, Executive Director, Benefits Administration Mr.
Robert Barlow, Director, Office of Contracts Review
Sen. Bill Ketron, Chairman Senators
Douglas Henry
GENERAL ASSEMBLY OF THE STATE OF TENNESSEE FISCAL REVIEW
COMMITTEE
320 Sixth Avenue, North — 8th Floor NASHVILLE, TENNESSEE
37243-0057
615-741-2564
Curt Cobb
Speaker Jimmy Naifeh, ex officio
Sen. Douglas Henry, Vice-Chairman Senators
Bill Ketron
Lt. Governor Ron Ramsey, ex officio
MEMORANDUM
TO:
The Honorable Dave Goetz, Commissioner Department of Finance and
Administration
FROM:
DATE:
RFS# 317.86-032 Department: Finance & Administration/Benefits
Administration Contractor: Connecticut General Life Insurance
Company (CIGNA) Summary: The vendor currently provides Self-Insured
Point of Service (POS) services for enrollees in the Middle
Tennessee region. The proposed amendment changes references from
the TN Insurance Plan to the Edison System, includes CY2009 rates,
increases the maximum liability by $6,200,000, and extends the
current contract an additional year, through December 31, 2009.
Maximum liability: $25,000,000 Maximum liability w/amendment:
$31,200,000
After review, the Fiscal Review Committee voted to recommend
approval of the contract amendment.
cc: Ms. Laurie Lee, Executive Director, Benefits Administration Mr.
Robert Barlow, Director, Office of Contracts Review
Supplemental Documentation Required for Fiscal Review
Committee
Contract' Number:
FA-06-16533 *RFS Number: 317.86-032
(if applicable)
*Current Contract Allocation by Fiscal Year: asShown on Most
Current ContractSummarySheet)
FY: 2006
FY: 2007
FY: 2008
FY: 2009
FY: 2007
FY: 2008
$
IF surplus funds have been carried forward s please give the
reasons and provide the authority for the carry forward
provision:
Contract Per Member Per Month (PMPM) expenditures are based on
estimates of annual plan membership for the term of the contract.
Actual membership may vary from the original estimates during the
term of each contract, and therefore funding needs may vary.
Monthly funding of contract expenditures is obtained, on an as
needed basis, from each separate plan funds (State Fund 55, Local
Education Fund 56, and Local Government Fund 58). Plan fund
revenues are obtained primarily from employer and employee
premiums, which are annually set by the committees, and utilized
for paying all health plan fund expenses (claims, and
administrative expenses, etc.), and can only be utilized for that
purpose. Under TCA -Title 8: Chapter 27-102 (a), 301 (b), and 207
(d) the State, Local Education and Local Government insurance
committees have the authority to enter into contracts with
insurance
IF Contract Allocation has been greater Contract Expenditures,
please give the reasons and explain where surplus funds were
spent:
6
Supplemental Documentation Required for Fiscal Review
Committee
companies, claims administrators, and other organizations for some
or all of the insurance benefits or services, including actuarial
and consulting advice for the purpose of administering the state
sponsored basic health plans. Monthly funding of contract
expenditures are obtained, on an as needed basis, from each
separate plan fund (State Fund 55, Local Education Fund 56, and
Local Government Fund 58). By approving the one year contract
extensions, the insurance committees have authorized the payment of
expenses from the funds for the additional one year extension. The
present estimated maximum liability of the contract is changed
based on the estimate of the additional one year expenses due to
the contract extension. These contracts are in allotment code
317.86 that is an off-line code and does not submit carry-forward
letters. The insurance funds are billed each month and they each
carry a fund balance which can be found on the Comprehensive Annual
Financial Report (CAFR).
IF Contract Expenditures exceeded Contract Allocation, please give
the reasons and explain how funding was acquired to pay the
overage:
Not applicable
If "other" please define:
Dates of All Previous Amendments or Brief Description of Actions in
Previous Amendments Revisions: (if applicable) or Revisions: (if
applicable)
April 2007 — Amendment # 1 Updates Contacts for contract (section
E.2.) and adds Edison requirements
November 2007 — Revision Re-allocate funds to establish retiree
funds codes 51, 52 and 53 as required by Comprehensive Annual
Financial Report (CAFR) of the State of Tennessee.
Method of Original Award: (if applicable) RFP
STATE OF TENNESSEE DEPARTMENT OF FINANCE AND ADMINISTRATION
BENEFITS ADMINISTRATION 312 Eighth Avenue North
Suite 2600 William R. Snodgrass Tennessee Tower Nashville,
Tennessee 37243
Phone (615) 741-3590 or (800) 253-9981 FAX (615) 253-8556
MEMORANDUM
To:
James White, Executive Director, Fiscal Review Committee
From: John Anderson, Director of Public Sector Plans, Benefits Ad
it
Date: September 25, 2008
RE: Amendments to extend the five (5) Connecticut Gefieral Life
Insurance Company (CIGNA) contracts for one year in addition to
adding an additional disease management program and contractor
responsibilities for the transmission of enrollment through Edison.
Contract numbers include FA-05-16530, FA-05-16531, FA-05-16532,
FA-05-16533 and FA-05-16534
Please find attached a Non-Competitive Amendment request for each
contract listed above to add language to the existing contracts
between the State, Local Education, and Local Government Insurance
Committees and the Connecticut General Life Insurance Company
(CIGNA) signed by Commissioner M. D. Goetz, Jr. The amendment was
approved by the Insurance Committees on July 31, 2008. The original
contracts, secured through a competitive procurement, contain
provisions under Section B.2 Term Extension that provide for this
extension. The contract also contains the right under Section
A.2.7, for the State to add, based on mutually agreeable terms and
conditions, additional disease management or other care management
programs. The contract amendments are the same for each contract,
except they are for different HMO and POS service areas (Nashville
HMO, Memphis HMO, POS West, POS Middle, and POS East). There is no
increase in the administrative fees, except for the cost of adding
the Contractor's Weight Complication Disease Management Program at
an additional administrative cost of $0.58 Per Member Per Month
(PMPM). Additionally, the Contractor also provides for an annual
guaranteed return of investment (ROI) for the additional programs.
Language within each contract amendment also addresses the
Contractor's responsibilities under the new Edison System. The base
contract is included as is the prior amendment, all revisions to
the contract summary sheets and the supplemental documentation
required for the Fiscal Review Committee.
Thank you for your consideration of this request.
Dave Goetz COMMISSIONER
D S EP252008
REQUEST: NON-COMPETITIVE AMENDMENT
EACH REQUEST ITEM BELOW MUST BE DETAILED OR ADDRESSED AS
REQUIRED.
1) RFS # 317.86-032
EXISTING CONTRACT INFORMATON
3) Service Caption : Self Insured POS Health Insurance - Middle
contract
4) Contractor : Connecticut General Life Insurance Company
5) Contract # FA-06-16533-00
6) Contract Start Date : January 1, 2006
7) Current Contract End Date IF all Options to Extend the Contract
are Exercised : December 31, 2008
8) Current Total Maximum Cost IF all Options to Extend the Contract
are Exercised : $25,000,000
PROPOSED AMENDMENT INFORMATON
10) Proposed Amendment Effective Date : January 1, 2009 (attached
explanation required if date is < 60 days after F&A
receipt)
11) Proposed , Contract End Date IF all Options to Extend the
Contract are Exercised : December 31, 2009
12) Proposed Total Maximum Cost IF all Options to Extend the
Contract are Exercised : $31,200,000
13) Approval Criteria : (select one)
use of Non-Competitive Negotiation is in the best interest of the
state
only one uniquely qualified service provider able to provide the
service
14) Description of the Proposed Amendment Effects & Any
Additional Service :
The amendment extends the contract with Cigna Healthcare to provide
administrative services to the state sponsored POS plan serving the
Middle Tennessee service area for one additional year (1/1/09
through 12/31/09) with a $0.58 increase in the Per Member Per Month
(PMPM) administrative fees to provide for the enhancement of
existing Disease Management programs and a decrease in the risk
sharing arrangement to a favorable guaranteed trend of 8%.
Additionally, the amendment adds the Contractor's responsibilities
for the transfer of plan enrollment information between the State's
Edison system.
c APPROVED
FISCAL REVIEW
15) Explanation of Need for the Proposed Amendment :
The option to extend the contract for an additional year was
included within the original contract, and the Contractor and
Benefits Administration have agreed to an increase of $0.58 PMPM in
the administrative fees for calendar year 2009 to provide for
enhancements in the Disease Management Programs provided by CIGNA.
The amendment continues the provision of the POS plan option for
the Middle Tennessee service area. Also, it is necessary to define
the Contractor's responsibilities for the interface with the
State's Edison system.
16) Name & Address of Contractor's Current Principal Owner(s):
(not required if proposed contractor is a state education
institution)
CIGNA, 1000 Corporate Center Drive, Franklin, TN 37067
17) Documentation of Office for Information Resources Endorsement :
(required only if the subject service involves information
technology)
select one: Documentation Not Applicable to this Request X
Documentation Attached to this Request
18) Documentation of Department of Personnel Endorsement :
(required only if the subject service involves training for state
employees)
select one: 7 Documentation Not Applicable to this Request
Documentation Attached to this Request
19) Documentation of State Architect Endorsement : (required only
if the subject service involves construction or real property
related services)
select one: Documentation Not Applicable to this Request
Documentation Attached to this Request
20) Description of Procuring Agency Efforts to Identify Reasonable,
Competitive, Procurement Alternatives :
Benefits Administration is in agreement with the continuation of
the contract with the increase in the PMPM administrative fee
providing for enhancements to the disease management programs and
favorable change in the risk sharing trend factor negotiated with
the Contractor. Benefits Administration considers a term extension
appropriate and in the best interest of the State and its'
employees.
21) Justification for the Proposed Non-Competitive Amendment
:
The modest increase in the administrative fees providing for
enhanced disease management programs and the favorable modification
of the risk sharing arrangement negotiated with the Contractor are
acceptable to the State, and the Contractor has accepted the data
interface requirements between Edison.
REQUESTING AGENCY HEAD SIGNATURE & DATE : (must be signed &
dated by the ACTUAL procuring agency head as detailed on the
Signature Certification on file with OCR— signature by an
authorized signatory will be accepted only in documented exigent
circumstances)
4
1
,A .
TO :
FROM :
INFORMATION SYSTEMS PLAN PROJECT: N/A
NUMBER OF FAX PAGES (including cover) : 1
The nature and scope of service detailed in the attached service
procurement document(s) appears to require Office for Information
Resources (OIR) review and support, because the procurement
involves information technology or information systems
services.
This communication seeks to ensure that OIR is aware of the
procurement and has an opportunity to review the matter. Please
determine whether OIR is supportive of the procurement. If you have
any questions or concerns about this matter, please call Marlene D.
Alvarez at 615-253-8358.
Please indicate below your response to this proposed procurement,
and return this communication at your earliest convenience (note
the return FAX number above).
Thank you for your help.
Attachment(s)
Must include the entire contract or amendment document and where
applicable, the non- competitive contract or amendment request
form. The original contract and any prior amendments that were
applied to the same section of the contract must be provided with
an amendment. Electronic copies of the contract, amendments, and
request form without signature are acceptable.
RFP documents must be provided in electronic form.
OIR Endorsement :
Date
POS-MIDDLE CIGNA FY 2006
LOCAL GOV'T 39,261.46 39,376.54 39,443.67 39,021.71 39,021.71
38,753.19
COMBINED TOTAL $
Total FY 2007
FYTDTotal
Ci>®IVli®D Finance and Administration Benefits
Administration
_
• r_'R^^^^Connecticut General Life Insurance Company n C- or o !/-
06-Elye Q L
Service Description . Self Insured POS (health insurance) — Middle
contract Amendment extends term with additional funds for the
extension and adds responsibilities regarding Edison.
Contract Begin Date Contract End Date SUBRECIPIENT or VENDOR? CFDA
# January 1, 2006 December 31, 2009 vendor
Mark Each TRUE Statement II Contractor is on STARS @ Contractor's
Form W-9 is on file in Accounts
Allotment Code; Cost Center Object Code Fund Funding Grant Code
Funding Subgrant Code 317.86 CP 896 51,52,53,55,56,58
FY State 'Federal Interdepartmental Other TOTAL Contract Amount
2006 $19,000,000 $19,000,000
2007 2,000,000 2,000,000
`„ IL
TOTAL: $31,200,000 $31,200,000 COMPLETE FOR AMENDMENTS ONLY -
State.Agency Fiscal Contact & Telephone #
Base Contract Prior Amendments
—..,j 312 Rosa L. Parks Avenue, Suite 2000
;ra
n
2009 2,000,000 Funding Certification (certification,-required by
TfCA.,§;9 413, that there is balance in the appropriation from
which the obligated expenditure is required to be .
that is not otherwiseericumbere6'fo.pay:obligations previously
incurred)paid2010 6,200,000 a
Nov: U; 7 2008;TOTAL: $25,000,000 6,200,000
End Date: 12-31-08 12-31-09
Contractor Ownership (complete for ALL base contracts— N/A to
amendments or delegated authorities)
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q
NOT Minority/Disadvantaged q Other Contractor Selection Method
(complete for ALL base contracts— N/A to amendments or delegated
authorities)
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Allotment Code Cost Center Object Code Fund Grant Code
Subgrant
Code CFDA # Amount
TOTAL $2,000,000
CI=®A # Amount
TOTAL $6,200,000
AMENDMENT TWO TO CONTRACT FA—06—16533—00
This Contract Amendment is made and entered by and between the
State of Tennessee, State Insurance Committee, Local Education
Insurance Committee, and Local Government Insurance Committee,
hereinafter referred to as the "State" and Connecticut General Life
Insurance Company, hereinafter referred to as the "Contractor." It
is mutually understood and agreed by and between said, undersigned
contracting parties that the subject Contract is hereby amended as
follows:
1.
The text of Contract Section A.2. is deleted in its entirety and
replaced with the following:
A.2. MEDICAL AND CARE MANAGEMENT SERVICES
A.2.1. The Contractor shall provide ,a medical and care management
system designed to help individual plan members secure the most
appropriate level of care consistent with their health status. In
carrying out this function, the Contractor must provide a system
for reviewing the appropriateness of hospital inpatient care,
skilled nursing, inpatient rehabilitative care and other levels of
care as necessary. The Contractor must have in place an effective
process that identifies and manages those members in need of
inpatient care. The following services must be provided: •
Identification of those patients in need of inpatient care for the
purpose of reviewing
the level of care requested and determining extent of care
required, and the identification of appropriate additional or
alternative services as needed. Process must include admission
review, or the pre-certification/ authorization of inpatient
stay,
' Concurrent review during the course of a patient's hospital
inpatient stay, where qualified medical management personnel
coordinate care with the hospital staff and patient's physician(s).
Process will review the continued hospitalization of the patient
and identify medical necessity for the stay as well as available
alternatives,
• Discharge planning providing a process where medial management
staff work with the hospital, patient's physician(s), family, and
appropriate community resources to coordinate discharge and
post-discharge needs of the patient. Prevention of readmission is
also a goal of the discharge planning process, and
® Review of urgent and/or emergency admissions, on a retroactive
basis when necessary, in order to determine medical necessity for
the service.
e Effective January 1, 2009, the Contractor shall provide the
Contractors' Personal Health Solutions Plus Model. Additional
services within this model include the following: Outpatient
Pre-Certification to include, but not limited to, Magnetic
Resonance Imaging (MRI), Magnetic Resonance Angiography (MRA),
Magnetic Resonance Spectroscopy (MRS), Computerized Tomography
(CT), Computerized Tomography Angiography (CTA), Positron Emission
Tomography (PET) scans, and nuclear cardiac imaging studies, and
inpatient review beginning the first day of hospital admission for
80% of all hospital admissions, with an average of 2.5 evaluations
per admission.
The Contractor shall provide a written report to the State on a
semiannual basis regarding the utilization of services and the
demonstrated effectiveness of the programs. Contractor guarantees a
Return on Investment (ROI) for the additional services provided
through the Contractor's Personal Health plus Model of at least
$1.00 PMPM. The ROI will be measured annually and based on a
methodology approved by the State's benefits consultant.
A.2.2. The aforementioned services should be included as required
and appropriate for hospital admissions. Pre-admission
certification should not be employed for admissions for the normal
delivery of children. Prospective review procedures may also
include pre admission testing criteria and criteria for same day
surgery procedures. If inpatient hospital pre-admission
certification is utilized, authorization or denial must occur
within one business day for urgent requests upon receipt by the
Contractor of all necessary
Page 1 of 29
information regarding the admission. Any appeals of requests for
continued hospitalization denials must be promptly processed and
involve physician-to-physician contact.
A.2.3. The Contractor shall maintain a case management/care
management program for Plan members (see Contract Section A.2.4),
utilizing procedures and criteria to prospectively and
retrospectively identify members that would benefit from case
management/ care management services. The process of care
management shall be capable of identifying the level of a patient's
health status through stratification of risk in order for patients
to receive the proper level of management appropriate to their
condition. Care coordination/care management should consist of a
full continuum of services designed to meet the level of need of
the plan member (wellness information through catastrophic case
management). Contractor shall provide a written report to the State
on a semiannual basis regarding the utilization of care management
services and the demonstrated effectiveness of the programs. The
Contractor shall utilize a system of Evidence Based Medicine in the
development and use of clinical practice guidelines, protocols or
pathways incorporating national criteria and local physician input
as appropriate. The Contractor shall also develop specialty care
and outpatient case management/care management protocols when
appropriate.
A.2.4. The Contractor shall submit to the State, at contract
implementation, two (2) written copies describing its medical
management/case management/care management procedures.
Additionally, the Contractor shall notify the State, in writing,
within thirty (30) days of any significant changes to these
programs during the course of the contract.
A.2.5. The Contractor shall maintain an internal quality assurance
program. The Contractor shall submit to the State, at contract
implementation, a summary of the plan indicating areas addressed
and methodology employed.
A.2.6. The Contractor's POS Plan must be accredited by either the
National Committee for Quality Assurance (NCQA) or the Joint
Commission on Accreditation of Health Care Organizations (JCAHO) or
URAC. If such accreditation is through NCQA, the Contractor shall
annually submit to the State its HEDIS report card.
A.2.7. The Contractor, in consultation with the State, must have in
place or implement within ninety (90) days or earlier of contract
effective date at least two (2) of the disease management programs
for the following chronic conditions: congestive heart failure,
coronary artery disease, chronic obstructive pulmonary disease. In
addition, a program for diabetes mellitus should be offered. The
Contractor shall develop and implement these disease management
programs for high cost, high prevalence diseases in the
State-sponsored population, designed to optimize the health status
of members therefore reducing the need for high cost medical
intervention. The programs shall include a statistically valid
methodology designed to measure the impact on health status,
utilization of medical services and claims cost of participating
members. The Contractor shall provide a written report at least
semiannually detailing plan member participation in the disease
management program, and a written report at least annually to the
State with the results of the analysis of the program's impact on
the health status, utilization and cost of medical services of
those participating in the program. The State reserves the
. right to review and comment on the programs. Failure to provide
programs acceptable to the State will result in an assessment
against the Contractor for payment to the State in the amount of
$20,000 for each program of each year of the contract term in which
the Contractor fails to establish such disease management programs.
The State reserves the right during the term of the Contract to
add, based on mutually agreeable terms and conditions, additional
disease management or other care management programs that have
proven to improve the health status of plan members and
effectiveness and quality of care delivered.
Page 2 of 29
A.2.8. Effective January 1, 2009, the Contractor shall provide the
following additional disease management programs: chronic
obstructive pulmonary disease, asthma, and low back pain. In
addition, Contractor shall also add their weigh complication
disease management program at an additional administrative fee of
$0.58 Per Member Per Month (PMPM) as included in Section C.3.
Payment Methodology. Contractor guarantees a Return on Investment
(ROI) for these additional disease management programs of at least
$1.44 PMPM. The ROI will be measured annually and based on a
methodology approved by the State's benefits consultant.
2.
The text of Contract Section A.3.7. is deleted in its entirety and
replaced with the following:
A.3.7. Pharmacy Rebates and Audits — the Contractor shall:
®
The Contractor shall remit to the State no less than quarterly a
check for 100% of all pharmacy program rebates including
administrative fees or other reimbursements received in connection
with any rebates, discounts, fee reductions, incentive programs or
the like received by Contractor as result of the drug manufacturer
payments which include volume of pharmaceutical use by or on behalf
of the State. The Contractor will retain 1.5% of the total billed
rebates as a withhold for rebates billed to, but not received from,
pharmaceutical manufacturers. The amount of the withhold shall be
included on all quarterly client rebate invoices. The Contractor
shall conduct an annual "true-up" of received verses paid rebates
to correct rebate underpayments.
m
With provision by the State of 30 days notice, and with execution
of any applicable third party confidentiality agreements, submit to
examination and audit of applicable pharmacy benefit data by the
State, including manufacturer rebate contracts and rebate payments,
by the State's authorized independent auditor (experienced in
conducting pharmacy rebate audits) during the term of this contract
and for three years after final contract payment (longer if
required by law). For the purpose of this requirement, Contractor
shall include its parents, affiliates, subsidiaries and
subcontractors. Such audits shall include third party
confidentiality agreements between the auditor and the party being
audited.
With provision by the State of 30 day notice, and with the
execution of any applicable third party confidentiality
agreements,' provide full disclosure of rebates received by the
Contractor, its affiliates, subsidiaries, or subcontractors on
behalf of the State, including line item detail by National Drug
Code number and line item detail by pharmaceutical manufacturer
showing actual cost remitted and other related claim and financial
information as needed to satisfy the scope of the audit. The
Contractor will, upon request by the State, disclose to the State's
authorized independent auditor (experienced in conducting pharmacy
rebate audits) any administrative fees or other reimbursements
received in connection with any rebates, discounts, fee reductions,
incentive programs, or the like received by Contractor as a result
of the drug manufacturer payments which include volume of
pharmaceutical use by or on behalf of the State. In addition,
Contractor will, upon request by the State, disclose fees or other
reimbursements received in connection with any grants, educational
programs or other incentive programs received by the Contractor on
behalf of the State.
With the execution of any applicable third party confidentiality
agreements provide at any time, upon 30 day notice from the State,
access to audit the pharmacy rebate
_ program, including but not limited to rebate contracts, special
discounts, fee reductions, incentive programs or the like with
pharmacy manufactures and program financial records as necessary to
perform accurate and complete audit of rebates received by the
State. At the State's discretion, the State's authorized
independent auditor (experienced in conducting rebate audits) may
perform such audit. The State is responsible for the cost of its'
authorized third party representative for such audits. If the
outcome of the audit results in an amount due to the State, payment
of such
Page 3 of 29
settlement will be made within 30 days of the Contractor's receipt
of the final audit report.
3. The text of Contract Section A.5.5. is deleted in its entirety
and replaced with the following:
A.5.5. The State shall determine all Plan policies and benefits
(see Appendix 7.3 of RFP # 317.86-032). Should the Contractor have
a question on policy determinations, benefits, or operating
guidelines required for proper performance of the Contractor's
responsibilities, the Contractor shall request a determination in
writing. The State will then respond in writing making a
determination within thirty (30) days. The Contractor shall then
act in accordance with such policy determinations and/or operating
guidelines.
A.5.5.1.
The State shall have the sole responsibility for and authority to
clarify and/or revise the benefits available under this program. It
is understood between the parties that the program cannot and does
not cover all medical situations. In a case where the benefits are
not referenced or are not clear, the Contractor shall utilize their
polices in adjudicating claims, and the Contractor shall advise the
Division of Benefits . Administration in writing, as to the
difference along with the Contractor's recommendation. Such matters
as determined by the State to have a significant impact on
administration of plan benefits shall be resolved by the
State.
4.
The text of Contract Section A.5.14. is deleted in its entirety and
replaced with the following:
A.5.14. The Contractor is expected to assist the State in
identifying fraud and perform fraud investigations of members and
providers, in consultation with the State, for the purpose of
recovery of overpayments due to fraud. Reviews must include all
possible actions necessary to locate and investigate cases of
potential, suspected, or known fraud and abuse. In the event the
Contractor discovers evidence that an unusual transaction has
occurred that merits further investigation, the Contractor shall
simultaneously inform the Division of Benefits Administration and
the Division of State Audit, in the Office of the Comptroller of
the Treasury. The State will review the information and inform the
Contractor whether it wishes the Contractor to: ® discontinue
further investigation if there is insufficient justification; or ®
continue the investigation and report back to the Division.of
Benefits Administration
and the Division of State Audit; or • continue the investigation
with the assistance of the Division of State Audit; or ®
discontinue the investigation and turn the Contractor's findings
over to the Division
of State Audit for its investigation.
9.
The text of Contract Section A.7.5. is deleted in its entirety and
replaced with the following:
A.7.5. The Contractor shall respond to all inquiries in writing
from the Division of Benefits Administration within one (1) . week
after receipt of said inquiry. In cases where additional
information to answer the State's inquiry is required, the
Contractor shall notify the State immediately as to when the
response can be furnished to the State.
6.
The text of Contract Section A.8. is deleted in its entirety and
replaced with the following:
A.8. DATA AND SPECIFIC REPORTING REQUIREMENTS
The Contractor shall:
A.8.1. Maintain an electronic data interface, via internet access,
with the State of Tennessee's Edison System, for the purpose of
accessing State member eligibility information. The Contractor is
responsible for providing the hardware and software necessary for
access. When the Contractor requires the exchange of Protected
Health Information (PHI) with the State of Tennessee, the State
recommends the use of second level authentication.
Page 4 of 29
This is accomplished using the State's standard software product
which supports Public Key Infrastructure (PKI). The Contractor will
agree to design a solution, in coordination with the State, to
connect to the State's SFTP server using a combination of the
password and the authentication certificate. Additionally, federal
standards require encryption of all electronic protected health
data at rest as well as during transmission. The State of Tennessee
uses public key encryption with Advanced Encryption Standard (AES)
to encrypt PHI. If the State adopts a different or additional
encryption standard or tool in the future, the Contractor is
expected, with adequate notice, to cooperate with the State to
maintain the security of protected information according to all
applicable State and Federal standards.
Furthermore, the Contractor must adhere to the privacy and security
regulations required by the Health Insurance Portability &
Accountability Act of 1996 (HIPAA).
A.8.1.1.
Notwithstanding the requirement to maintain eligibility data, the
Contractor is not authorized to initiate data changes to the system
without the State's approval, as detailed below. This prohibition
shall include, but not necessarily be limited to: initiation,
termination, and/or changes of coverage.
A.8.2. Maintain, in its computer system, in-force eligibility and
enrollment records of all State plan participants. Specific
additional obligations, relative to this requirement, are the
following:
A.8.2.1.
Weekly Enrollment Update: To ensure that State plan participants'
enrollment records remain accurate and complete, the Contractor
commits to the following:
O to receive, via secure medium (see A.8.1.) weekly enrollment data
electronic transfer files from the State, in the State's Edison 834
transaction formats, for participants who are maintained in the
State's Edison System (See Attachment D of this contract), for
participants who are maintained in the State's Edison System [files
will include full population records for all participants and will
be in the format of ANSI ASC X12.84, Benefit Enrollment and
Maintenance (834), version 004010X095A1, with a few fields being
customized by the state];
O to complete each of the following tasks by the indicated
deadline:
Required Task Deadline Penalty for missed deadline 1.
Systematically process and update, via computer programs, the
Contractor's database, utilizing the State's weekly enrollment file
records
within three (3) workinq days of
$100.00 per day for the first (1 s`) and second (2 "d) working days
out of compliance; $500.00 per working day thereafter
receipt of the files from the State
2.
Resolve all mismatches identified by the processing of the weekly
files; "mismatches" are defined as: Any difference of values
between the State's and the Contractor's databases.
within six (6) workinq days of
$100.00 per day for the first (1 st) and second (2nd) working days
out of compliance; $500.00 per working day thereafter
receipt of the files from the State
and to complete and submit to the State, the Weekly File
Transmission Statistics Report (format to be provided by the
State), within seven (7) workinq days of receipt of the weekly
files.
The Contractor shall also require of its subcontractors, as
applicable, to maintain Weekly Enrollment Updates on a timely
basis.
NOTE: Section A.8.2.1 shall be monitored by the State as
Performance Guarantee # 7 (see Contract Attachment A).
Page 5 of 29
A.8.2.2.
Enrollment Data Match: Upon request by the State, not to exceed two
(2) times annually, the Contractor shall submit to the State, via
secure medium, its full file of State enrollees, by which the State
will conduct a data match against the State's Edison database. The
purpose of this data match will be to determine the extent to which
the Contractor is maintaining its data base of State members, as
required by Section A.8.2.1.
Data will be sent by the Contractor to the State in a format
specified by the State. Failure by the Contractor to submit
records, and in the proper format, within fourteen (14) calendar
days of the request from the State, shall result in a penalty of
$10,000 per request.
Results of this match will be communicated to the Contractor,
including any requirements — and associated timeframes — for
resolving the discrepancies identified by the data match. Failure
by the Contractor to resolve the discrepancies, within the
specified timeframe(s) will result in a penalty to the Contractor
of $10,000.
For the purpose of the requirements of this section, "mismatches"
are defined as: Any difference of values between the State's and
the Contractor's databases.
A.8.3. Maintain a duplicate set of all records relating to the
benefit payments in electronic medium, usable by the State and
Contractor for the purpose of disaster recovery. Such duplicate
records are to be stored at a secure fire, flood, and theft-
protected facility located away from the storage location of the
originals. The duplicate data processing.. records shall be
updated, at a minimum, on a daily basis and retained for a period
of 60 days from the date of creation. Upon notice of termination or
cancellation of this contract, the original and the duplicate data
processing records medium, and the information they contain shall
be conveyed to the State on or before the effective date of
termination or cancellation.
A.8.4. Reconcile, within ten (10) working days of receipt, payment
information provided by the State. Upon identification of any
discrepancies, the Contractor shall immediately advise the
State.
A.8.5. Maintain the benchmarks required by each of the provisions
contained in Contract Attachment A, Performance Guarantees, through
the entire contract term.
A.8.6. Annually provide the State with a GeoNetworks ® report
showing service and geographic access (see Contract Attachment A:
Performance Guarantee # 8). The State shall review the network
structure and shall inform the Contractor in writing of any
deficiencies the State considers to deny reasonable access to
health care. The State and Contractor shall then mutually develop a
plan of action to correct said deficiencies within sixty (60) days
from the date the Contractor was first notified of the
problem.
A.8.7. Submit health and medical claims data to the State's
healthcare data management vendor and to the Department of Finance
and Administration, Office for Information Resources on a quarterly
basis or more frequently as mutually agreed to by both parties
during and following the term of this contract, until all claims
incurred during the term of this contract have been paid. Data
shall be submitted in the format detailed in Appendix 7.7, of RFP
#317.86-027. The Contractor shall ensure that all claims processed
for payment have complete ICD-9 and CPT4 codes and valid provider
identifications.
For each quarter of the contract term, and any extensions thereof,
claims data must meet the quality standards detailed in Contract
Attachment A, Performance Guarantee # 9, as determined by the
State's healthcare claims data management vendor.
Page 6 of 29
The cost of the initial claims data conversion to the format of the
State's data management vendor shall be borne by the Contractor.
The current vendor currently